A US court has temporarily stopped Dr Reddy's Laboratories from selling a generic version of AstraZeneca's antacid Nexium in that market over allegations of trademark infringement.Mumbai: A US court has temporarily stopped Dr Reddy’s Laboratories from selling a generic version of AstraZeneca’s antacid Nexium in that market over allegations of trademark infringement.

The order of the District Court in Delaware has come on a suit filed by AstraZeneca, which objected to the Indian company using purple colour for the generic version.

AstraZeneca has used the purple colour to market Nexium and Prilosec, which are used for the treatment of severe gastric diseases, besides having the trademark over the name ‘The Purple Pill’.

Since 2001, the British-Swedish multinational has on an average made $22.6 billion in revenue from these purple pills, which have been among the flagship drugs for the company.

If Dr Reddy’s arguments were carried to the logical end, the loss of a branded company’s patent monopoly would inevitably result in a loss of its trademark rights, “a result not consistent with the law or the market place”, the judge noted in his ruling.

The company is also battling a US regulatory warning over manufacturing practices at its three facilities, a development that is expected to affect 10-12% of its total revenue.

Dr Reddy’s shares,which were already down following the US Food and Drug Administration warning, slipped nearly 5% to close at Rs 3,336.30 on the Bombay Stock Exchange Tuesday. Dr Reddy’s said the order has been passed pending further hearing or trial.

“The company is complying with the order of the court and simultaneously evaluating all possible options to resolve the matter at the earliest,” it said. Though Dr Reddy’s did not specify the total revenue impact from this decision, analysts said it would add up to the existing troubles of the company.

“We believe that the development will increase further complexity of the current lean patch of the company and impact its sales growth in near term, as the restrain order will hold further distribution of its unsold inventory. Its products in the distribution network however will continue and would provide partial relief for the company,” said Surjit Pal, from the brokerage firm Prabhudas Liladhar.

“While the event is negative for the company, it would be too early to quantify the impact from the loss of sales for DRL in US Nexium business.”

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